By Alois Vinga
THE Reserve Bank of Zimbabwe (RBZ) has injected US$3,6 billion since its introduction, amid calls for the institution to deploy tools at its disposal to reprimand deviations from critical national targets, Finance Minister, Mthuli Ncube said Thursday.
Speaking during the 2023 National Budget presentation Ncube said the platform had served as a bulwark in supporting industrial productivity.
“Cumulatively, US$3,6 billion was allotted through the auction system since its establishment, covering both the main and small to medium enterprises auctions, as at 31 October 2022.
“The bulk of allotments were to the productive sectors of the economy, accounting for 73% of the total. Raw materials accounted for 41% of the total allotments, whilst 23% funded capital goods such as machinery and equipment, with 6% going towards medicals and chemicals,” he said.
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The Treasury boss said introduction of the Willing Buyer Willing Seller (WBWS) foreign exchange market system, coupled with the policy measures to reduce speculative borrowing and curb abuse of funds allocated from the forex auction system, weekly bids on the facility have declined from an average of US$42 million six months ago, to the current weekly average of US$11 million.
Recent developments, where the gap between the official and parallel exchange rates have narrowed from above 500% between January and July 2022, to less than 15% currently, indicates convergence that engenders price stability going forward.
Going forward, Ncube said government and the central bank will strengthen liquidity management to sustain exchange rate stability, including refinement of the foreign exchange market to enhance efficiency.
“In this regard, the government is setting a month-on-month inflation target range of between 1% to 3%, and a fiscal budget deficit of not more than 1.5% of GDP during 2023.
“Going forward, any deviations from these critical targets will warrant further interventions by both fiscal and monetary authorities, with the Monetary Policy Committee and the central bank expected to deploy all tools at their disposal to ensure the attainment of these targets, consistent with their mandates,” added Ncube.